PCP
Car Finance

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Rates from 7.9% APR. Representative APR 8.9%
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Representative example for illustration purposes only. Based on 2018 (18) Land Rover Range Rover Sport. Exact rate will be based on your circumstances, subject to status.

Representative example: Borrowing £43,995.00 over 49 months, £10,444.89 deposit, on PCP, an annual mileage of 8,000pa, with a Representative APR of 8.9%, an annual interest rate of 8.9% (Fixed) the amount payable would be £499.00 per month, an optional final payment of £18,877.05, with a total cost of credit of £9,278.94 and a total amount payable of £53,273.94

We look to find the best rate from our panel of lenders and will offer you the best deal that you’re eligible for. We don’t charge a fee for our service, but we do earn a commission. This does not influence the interest rate you’re offered in any way.

What is PCP?

PCP is a type of car finance loan that gives you options; at the end of your agreement, you can choose to buy the car, give it back, or trade it in for a new one.

Plus, unlike HP, your PCP loan doesn’t have to cover the full cost of your car. Instead, you only need to borrow the amount of value that the lender thinks your car will lose while you have it.

This means you’ll typically have lower monthly repayments than you might with other car finance options, but you won’t automatically own the car when the agreement ends. 

PCP could be a great choice for you if you like to change car regularly, don’t drive a lot of long distances, and want to keep your monthly payments low.

Keep in mind that terms and conditions will apply – you’ll need to agree to a set mileage and not damage the car to avoid paying extra charges.

How much you’ll pay each month will depend on:

  • The size of your deposit
  • The car you’ve chosen
  • The cost of your car
  • The interest rate
  • The number of miles you drive
  • How much the lender expects the car to be worth at the end of your agreement.

What is PCP Car Finance?

Watch this short video to find out how personal contract purchase works, the pros and cons, and whether it could be the right choice for you.

What does PCP stand for in car finance?

PCP car finance stands for personal contract purchase. Other types of car finance available include hire purchase or HP, lease purchase, and personal car loans.

What happens at the end of a PCP agreement?

At the end of your PCP agreement, you have options.

You can either choose to give the car back, buy it by paying the one-off balloon payment, or (if you have equity left in the car) trade it in as a deposit in a new PCP car deal – it’s up to you!

What is a balloon payment?

A PCP balloon payment is the term that’s used to describe the final amount you’ll need to pay to buy the car at the end of your agreement. It’ll be based on the Guaranteed Minimum Future Value (GMFV) of your car and could range from a few hundred to a few thousand pounds.

If you’re unable to pay the balloon payment in one go, at CarFinance 247, we work with lenders that can offer refinance loans to help break down the cost into manageable monthly repayments.

How does PCP finance work?

It’s as easy as 1, 2, 3…

  1. The deposit

If you have funds to put down upfront, then you could reduce the amount you need to borrow but 0 deposit options are available too.

  1. The amount you borrow

 The amount you’ll borrow will be how much value the lender thinks your car will lose while you have it, not the full cost of the car. 

  1. The balloon payment

 You’ll need to pay the balloon payment if you want to buy the car at the end of your PCP loan agreement.

What are the pros and cons of PCP?

Car finance can help you break down the cost of your car, but personal contract purchase might not work for everyone. Check out some of the advantages and disadvantages of PCP car finance:

Pros:

  • Monthly payments might be lower than they would be with other car loan options
  • You have options – you can pay the balloon payment and buy the car, give it back, or trade it in for a new one
  • No surprises – your monthly payments are fixed
  • You can access newer used cars – no getting stuck with an old banger!

Cons: 

  • You won’t own the car during your PCP loan period or when it ends (unless you pay the balloon payment)
  • You’ll be charged if you drive more miles than you agreed to or damage the car
  • You might need a deposit
  • If the GMFV is very close to the actual car value, you won’t have a lot of positive equity left to use in a new agreement

Is PCP the right option for me?

A PCP car deal could work for you if:

  • You like to change car regularly
  • You’re a careful driver
  • You don’t need to drive a lot of long distances

Looking for more details? Head over to the blog where we get under the hood of PCP car finance with our complete guide.

What is the difference between hire purchase and personal contract purchase?

Trying to decide between hire purchase and personal contract purchase? Here’s what you need to know.

Do you want to own the car?

Both these car finance options can lead to car ownership but with PCP, it’s not guaranteed. You’ll be effectively hiring the car during the length of your agreement but with HP, when you reach the end of the agreement and pay the ‘Option to Purchase’ fee, the car will be all yours! PCP gives you more options and you will only own the car if you choose to pay the balloon payment, which can be thousands of pounds. However, it could be more flexible than HP as, if you don’t want to buy the car, you can return it or use any positive equity as a deposit in a new deal.

How much do you want to pay?

Hire Purchase loans can come with higher monthly repayments than other forms of finance including personal contract purchase as you borrow the full car cost, not just the amount that it will lose value during your loan term. This may make the amount you pay back overall higher too. If you’re looking for cheaper monthly repayments, PCP could be the better choice for you.

Do restrictions apply?

Personal contract purchase agreements typically include annual mileage limits, and you’ll have to pay extra if you exceed them. You may also be charged if you damage the car (beyond normal wear and tear). With hire purchase, you are unlikely to have any mileage restrictions so if you tend to drive a lot of long distances, it might be the best option for you.

Can I get a PCP loan?

To be eligible to apply for a PCP loan with CarFinance 247, you must be over 18 and have at least three years’ address history in the UK.

When you apply for car finance, we’ll look to find you an approval in principle from our panel of lenders. This will involve a soft credit check but won’t impact your credit score. Some lenders do require borrowers to have a good credit score, and this could increase your chances of securing a PCP loan.

Why come to us for your PCP car finance?

For us, used car finance is all about helping people improve their everyday lives.

Whether it’s sorting out the school run, getting that big boot for the big shop, or a car you’re proud to park outside the office, we work to get the right deal for you.

With our panel of lenders, we can look to find PCP car loans for people with good credit, bad credit, and somewhere-in-between credit.

Plus, you’ll have a dedicated account manager on hand to help you through the process.

What’s next? How it works

Whether you’re looking for a Peugeot on PCP, a Honda on HP, or a personal loan for a Land Rover, we could help!

It all starts with a quote. If you’re approved in principle, your account manager will then give you a call to talk through your options. No strings attached. They can answer any questions you have and give you access to our car search – a treasure trove of over 100,000 used cars ready and waiting to find a home. Found a car elsewhere? We can still help – just let your account manager know.

Frequently asked questions

A good APR on a PCP deal depends on your individual circumstances, the amount you want to borrow, the car you want to buy, and your credit history. Every application for finance is assessed individually and the APR offered will reflect your unique situation.


At CarFinance 247, we work with lenders that can offer PCP car finance for used cars that will be up to 10 years old with a maximum mileage of 100,000 miles at the end of your agreement.


Deciding whether a personal contract purchase is worth it depends on your individual circumstances. If you don’t travel a lot of long distances, like to change car regularly, and are looking for low monthly repayments, then personal contract purchase might be the right car finance option for you. However, if car ownership is important to you and you don’t want to worry about mileage restrictions then you might find the prospect of a balloon payment at the end of your agreement or paying extra to exceed your mileage limit means a PCP deal wouldn’t be worth it for you.


No, personal contract purchase isn’t a lease, but it does work in a similar way. With a lease or personal contract hire (PCH), you will never own the car and instead you will pay fixed monthly payments throughout the term before returning the car. Leasing is also typically only available on new cars. PCP loans are available for used cars and, unlike a lease, you will have the option to buy the car at the end of the agreement by paying the balloon payment.


There is no set deposit amount required on a personal contract purchase agreement. In fact, at CarFinance 247, we work with lenders that can offer no deposit PCP deals. However, if you do have a lump sum to put down upfront then this can reduce the amount you have to borrow and will mean you have less interest to pay overall.


You could be eligible for personal contract purchase if you’re over 18 and have at least three years’ address history in the UK. At CarFinance 247, we work with lenders that can offer PCP loans to people with a variety of different circumstances. PCP may be available to you even if you’re self-employed, retired, work part-time, serve in the armed forces, or are claiming benefits. You can make an application – with no impact on your credit score – to find out more.


Yes, at CarFinance 247 we work with lenders that can offer PCP car finance to people who are agency contract workers, self-employed, retired, or working part-time.


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CarFinance 247 is a trading name of CarFinance 247 Limited. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. (Registration Number 06035525).

CarFinance 247 is authorised and regulated by the Financial Conduct Authority for insurance distribution and credit broking (Firm Reference Number: 653019). CarFinance 247 is registered with the ICO (Registration Number Z1897658).

Finance is subject to status and is only available to UK residents aged 18 and over. Written quotations are available on request.

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